Oil headed for the longest weekly rising streak in 14 months in New York after economic growth accelerated in China, the world’s second-biggest crude consumer.
West Texas Intermediate traded close to a four-month high after gaining the most in two weeks yesterday. The International Energy Agency raised forecasts for global oil demand this year as demand rises in China and said the world oil market is “tighter” than previously estimated. China’s gross domestic product rose 7.9 percent in the fourth quarter from a year earlier, compared with 7.4 percent in the previous period, the National Bureau of Statistics said today in Beijing.
“I don’t think there will be a hard landing in China,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark.
Crude for February delivery was at $95.36 a barrel, down 13 cents, in electronic trading on the New York Mercantile Exchange at 12:57 p.m. London time. The contract advanced 1.3 percent to $95.49 yesterday. That was biggest gain since Jan. 2 and the highest close since Sept. 17. Prices gained 1.9 percent this week for a sixth straight advance, the longest run of gains since November 2011.
Brent for March settlement slipped 32 cents to $110.78 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $14.99 to WTI futures for the same month. The gap was $15.16 yesterday, the narrowest closing level since July 24.
“All of a sudden, the market looks tighter than we thought,” the Paris-based IEA said, boosting its 2013 global demand forecast by 240,000 barrels a day. World consumption will increase by 900,000 barrels a day, or 1 percent, this year to average a record 90.8 million.
Saudi Arabia, the world’s largest exporter, reduced production from its highest in 30 years, and inventories in developed economies are contracting after accumulating in much of 2012, according to the IEA.
China’s oil processing rose 3.7 percent last year to 467.9 million metric tons, the National Bureau of Statistics said in a report today. Refining in December increased 8.4 percent from a year ago to a record 10.2 million barrels a day, beating the previous high in November.
The Brent pipeline system is pumping oil from all North Sea platforms shut earlier this week, except Cormorant Alpha.
The pipeline, which carries about 10 percent of the U.K.’s production, resumed partial pumping yesterday and now more crude is flowing into it because most of the fields have resumed activity, an official at Abu Dhabi National Energy Co. PJSC, known as Taqa, said today by phone from the city of Aberdeen, Scotland. The official declined to say what the current flow rate is.
WTI may rise next week on speculation that stronger economic growth will boost fuel demand, a Bloomberg survey showed. Fourteen of 36 analysts and traders, or 39 percent, forecast crude will increase through Jan. 25. Twelve respondents, or 33 percent, predicted a drop. Ten said there would be little change. Last week, 50 percent projected a gain.
Oil gained yesterday after Algerian forces raided a natural gas plant to free workers seized by an al-Qaeda-linked group. U.K. Prime Minister David Cameron said the nation should prepare for “bad news ahead” in a broadcast interview yesterday.
The rally in New York may stall as a technical indicator shows futures have risen too quickly for further gains to be sustainable. The 14-day relative strength index closed yesterday at 71.1, the highest since Feb. 27, according to data compiled by Bloomberg. A reading above 70 signals a market is overbought and will probably decline. The RSI is at 71.4 today.
WTI dropped 7.1 percent in 2012 as the U.S. shale boom deepened the glut at Cushing, Oklahoma, the delivery point for WTI and America’s largest storage hub. That left it at an average discount of $17.47 a barrel to Brent last year, compared with a premium of about 7 cents in the five years through 2010. London-traded Brent, the benchmark grade for more than half the world’s crude, climbed 3.5 percent last year.
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